FTC: Medical lab lost patient info on peer-to-peer network

An Atlanta medical testing laboratory had billing information for more than 9,000 customers land on a peer-to-peer file-sharing network in 2008, the U.S. Federal Trade Commission has alleged.

The Atlanta lab disputes the agency's assertions of security breaches

By
Grant Gross
| 29 Aug 2013

An Atlanta medical testing laboratory had billing information for more than 9,000 customers land on a peer-to-peer file-sharing network in 2008, the U.S. Federal Trade Commission has alleged.

The FTC has filed a complaint against LabMD, alleging that the company failed to reasonably protect its customers' personal data, the agency said Thursday. In addition to the P-to-P allegation, LabMD lost personal information of about 500 customers to identity thieves in 2012, the agency alleged.

A LabMD spreadsheet found on a P-to-P network contained sensitive personal information for more than 9,000 consumers, including names, Social Security numbers, dates of birth, health insurance provider information, and standardized medical treatment codes, the FTC said.

LabMD said it will "vigorously" fight against the FTC allegations. "The Federal Trade Commission's enforcement action against LabMD based, in part, on the alleged actions of Internet trolls, is yet another example of the FTC's pattern of abusing its authority to engage in an ongoing witch hunt against private businesses," the company said in a statement. "The allegations in the FTC's complaint are just that: allegations."

The FTC has "repeatedly overstepped" its authority in bringing these types of complaints, the company said.

LabMD's CEO, Michael Daugherty, in an August 2012 Atlanta Business Chronicle report also denied the FTC's allegations as the agency was investigating the alleged data breaches.

LabMD shared some information as part of a research project involving P-to-P security vendor Tiversa, Daugherty told the business publication. Tiversa then tried to use its possession of a LabMD spreadsheet to convince the medical lab to buy its security services, he said.

The FTC, however, alleged that LabMD has failed to implement a comprehensive data security program to protect customer information. The company did not use readily available measures to identify commonly known or reasonably foreseeable security risks and vulnerabilities to this information, the FTC said.

LabMD also did not use adequate measures to prevent employees from accessing personal information not needed to perform their jobs, and did not adequately train employees on basic security practices, the FTC said.

The FTC complaint also alleged that in 2012 the Sacramento, California, police department found LabMD documents in the possession of identity thieves. These documents contained personal information, including names, Social Security numbers and, in some instances, bank account information, of about 500 consumers, the agency said.

The complaint includes a proposed order against LabMD that would prevent future violations of law by requiring the company to implement a comprehensive information security program, and have that program evaluated every two years by an independent, certified security professional for the next 20 years. The order would also require the company to provide notice to consumers whose information LabMD has reason to believe compromised.

LabMD has asserted that documents provided to the agency contain confidential business information, prompting the FTC to hold back the complaint from public release unless those issues are resolved.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is [email protected]